An everyday tale of family and political life with a dollop of Formula One and various random thoughts on the side.

Wednesday, July 31, 2013

In Full: Michael Moore's speech to the Chamber of Commerce in Dunfermline: Scotland, better, safer and stronger in UK

Like it says on the tin, the whole speech delivered this morning, which neatly summarises what he's been doing in terms of the Independence debate over the past few months. And reminds us all, that, actually, independence would be a pretty drastic change for a lot of risk and uncertainty.
The Chambers of Commerce network right across the United Kingdom plays a
vital role in growing British businesses.

I know that the network here in Fife is central to ensuring that the area
attracts and supports its local businesses.

It’s a great opportunity for me to be able to talk with you about the
measures we are taking to support our economy, and the future that we want to
see for you and your businesses in the years ahead.

Economy

There is no doubt that the last few years have been a real challenge for us
all: for individuals, for families and for businesses.

We have experienced an unprecedented global financial crisis; the UK’s largest ever peacetime deficit;

and a series of external shocks, both in the euro area and to commodity
prices, that have continued to make our recovery a challenge.

Returning the whole of the UK to sustainable and balanced growth was the
unifying objective for the two parties who came together in the national
interest to form our Coalition Government.

We remain fully focussed on delivering that.

By reducing the deficit, restoring stability and rebalancing the economy we
want to equip the UK to compete in the global race.

Recent news has shown that the economy is on the mend and moving from the
rescue phase to recovery.

Last week’s UK GDP figures showing 0.6% growth in the three months to June
were encouraging – above forecast and double the rate of the first
quarter.

We have made substantial progress in our plan to cut the deficit, reduced
by a third as a percentage of GDP since we came to power.

And we have seen significant progress over the past year in job creation
and reducing unemployment.

To continue to make progress, the UK Government is ensuring the right
business environment is in place for you, and for the families and communities
who depend on you for their livelihoods.

We are supporting the recovery, reducing taxes remains an important
priority – in particular by cutting the main rate of corporation tax to 20%.

This is helping to deliver on our objective of making the UK’s tax system
the most competitive in the G20.

But tax reform is only part of the story.

It sits alongside the Bank of England’s monetary activism of recent years
and our programme of financial sector reform, particularly of the banks, as key
components of fixing the economy.

And we are determined to invest in our future, too.

I’ve already mentioned the UK Government’s support for the Queensferry
Crossing, a less prosaic name than the previous working title of ‘the Forth
Replacement Crossing’.

And the Queen Elizabeth class carriers, too. These are important parts of our investment programme.

But we have also provided over 1.7 billion pounds of additional capital
spending power to the Scottish Government since the Spending Review of
2010.

It is for the Scottish Government to invest that money as it sees fit –
including in the ‘shovel ready’ projects it has been so keen to promote.

Where responsibility sits with the UK Government, we are working hard to
improve Scotland’s infrastructure links with the rest of the UK and to get the
construction sector moving again.

In the housing sector, we are introducing the Help to Buy Mortgage
Guarantee Scheme, which will offer up to 12 billion of Government guarantees to
lenders who provide mortgages to people with a deposit value of between 5 and 20
per cent.

Helping to make more high loan-to-value mortgages available to potential
home-owners who can’t save for the large deposits needed following the financial
crisis.

And we have set out a clear industrial strategy to ensure that Government
is working with the experts in our key industries: such as construction,
renewable, oil and gas and life sciences.

We know that you - and businesses like you, right across the United Kingdom
- have been working hard to do your bit too.

We need to keep working together to ensure that the economic recovery
gathers strength and is sustained – we are not complacent about the challenges
that remain.

The Future of Scotland

In this environment I know that right now all of you remain focussed on
addressing the challenges we face day to day.

But aside from that, I know that the next issue on everyone’s minds is
‘what future will Scotland choose in the referendum next year?’

It’s just over 400 days until those of us living here in Scotland will make
our biggest ever collective decision.

It will be a big, bold moment.

Offering us the choice between staying within the most successful
partnership of nations the world has seen, or an irreversible decision to leave
the United Kingdom and go our own, separate way.

To my mind it will come down to one simple question: which of the
alternatives is better for me, my family, and my country?

For me the answer to that is absolutely clear.

As a proud Scot I believe that we can enjoy a better future as a nation if
we remain within the United Kingdom family.

With a strong Scottish Parliament and a strong voice in the UK Parliament
giving us the best of both worlds

It is clear to me that, as Scots, being part of the United Kingdom gives us
greater opportunities; greater security and an unrivalled platform on the world
stage.

And I believe all that is worth keeping.

If you focus in on the economy, which I am sure will dominate your
thinking, the argument for staying in the UK is a powerful one.

As part of the world’s sixth largest economy, Scotland has strength in
numbers - our 5 million people have unfettered access to a highly integrated
single market across the UK.

More than 300,000 Scottish businesses can sell goods and services in a
domestic market of more than 60 million people.

And enjoy support from an unparalleled network of embassies and consulates
boosting their trade around the world and creating thousands of jobs at
home.

We have seen for ourselves the ability of the UK economy to absorb huge
financial shocks like the banking crisis which devastated our two largest
Scottish banks.

And, as has been debated at length – as part of the UK we have certainty
about our shared currency.

Over the last decade and a half we have created a devolution settlement
which maintains these inherent advantages of the UK, while developing our
decision making here at home at the Scottish Parliament.

Since the landmark creation of the Parliament at Holyrood we have seen it
anchored in Scottish public life and seen its powers enhanced – significantly by
the Scotland Act of last year which brings major tax and borrowing powers north
of the border, in the biggest transfer of financial powers from London to
Edinburgh since the Act of Union sent them the other way.

But it’s not just by milestone Acts of Parliament that powers have been
transferred.

We have seen flexible, responsive arrangements evolve that have allowed
economically important powers like the management of our railways come north,
while ensuring that when it makes sense to legislate on a pan-UK basis, as we
have done in relation to tackling organised crime, we can still do it in
Westminster with the consent of the Scottish Parliament.

This ‘best of both worlds’ approach is a real strength for us.

And I believe the settlement will develop further.

For me as a Liberal Democrat, seeing the commitment to further devolution
coming from all three parties who support Scotland staying within our United
Kingdom is a real milestone in our country’s development.

But before we can take decisions on changes to our devolution settlement we
need to take the most fundamental decision: are we in, or are we out?

Scotland Analysis Programme

As the UK Government, our proposition is clear: Scotland should remain the
integral part of the United Kingdom that it is, and has been for over the last
300 years.

That is why over the last six months we have set out in great detail on
fundamental economic questions what Scotland has as part of the UK
and what all of us need to weigh up as we consider our vote.

I recognise that before many people can make their choice they want
information, and they want to hear the case for each option.

So far we’ve published four papers in our Scotland Analysis Programme,
amounting to over 460 pages of argument and data.

I’ll admit the title isn’t all that catchy – but it reflects a really
important point about the way we are approaching this debate.

Analysis.We are doing the homework,

We are examining the evidence

And we are setting out the facts.

Our first paper sets out the legal position of Scotland within the United
Kingdom – and the legal realities of becoming a separate independent state.

Because it’s important for us all to be clear that independence means
Scotland leaving the United Kingdom.

And leaving the United Kingdom, means leaving the state that we have built
together, with our fellow citizens who live in England, Wales and Northern
Ireland.

It means there are no guarantees that an independent Scotland would be a
member of international organisations like the EU, NATO, G8 and G20.

A separate Scottish state would need to apply to join these
organisations.

For the UN that could be a relatively simple process, but it’s a process
that a newly independent state would have to go through none the less.

For other organisations there are detailed negotiations that would be
required before an independent Scotland could be a member.

For the EU that would mean a newly independent Scotland negotiating with 28
existing Member States.

An opt-out from the Schengen Agreement for the free movement of people;
and

An agreement on Scotland’s contribution to the EU budget having left the
UK’s rebate behind.

But it is not just the international implications of leaving the United
Kingdom that need to be considered.

Our second paper in the Scotland analysis series examined in detail the
currency arrangement we have, right now, as part of the United Kingdom, and the
options that would be open to an independent Scottish state.

All of the options:

Seeking a formal currency union with the continuing UK state;

Using sterling outside of the UK, like the Isle of Man;

Adopting the Euro;

Or a separate Scottish currency altogether.

None of these options is the same as the shared currency we have now.

All are sub-optimal – for Scots and Scottish businesses and for the rest of
the UK - to the current system we have of a shared pound sterling and a shared
Bank of England.

And as the Chancellor made clear when he launched our currency paper, it is
‘unlikely’ that the continuing UK would choose to have a formal currency union
with a separate Scottish state.

We’ve published a paper on our Financial Services sector

Setting out the importance of the sector to Scotland, where financial
services contribute more than 8 per cent of Scottish GDP and support around 7
per cent of Scottish employment.

And the enormous benefit that this strong Scottish industry gets from being
part of the UK financial sector, not least the support that the size and
strength of the UK can provide in times of trouble.

We recently produced a fourth paper that examines the benefit of our shared
single domestic market.

For whilst the border between England and Scotland means a great deal
historically, it means nothing for our businesses large and small that operate
across that border on a daily basis:

Whether that be the 300,000 people that travel into or out of Scotland from
the rest of the UK each day to work;

Or the lorries that transport goods to and from Scotland providing free
unfettered access to a marketplace of 60 million rather than five;

Or the shared infrastructure we have like our broadband networks and energy
markets.

Through our work to date, I believe we have established the key facts in
the debate.

Independence would mean the end of devolution and Scotland leaving the UK,
its institutions and its place in the world;

Independence would mean a fundamental change on currency;

A big change in regulation and the bodies we interact with every day

A big change for our position in Europe;

And – as we’ve seen reported extensively in recent days – some big
challenges for our pensions.

Over the autumn period we will develop these and other arguments
further.

The other side’s arguments

But we’ve not just been setting out our own case over the past six months.

We’ve been looking carefully at the arguments from the other side
too.

We’ve looked carefully at the Scottish Government’s approach.

And you have to give them credit for some creative thinking about what
independence means.

I have always taken it to mean a separate country making its way in the
world, choosing new and different policy paths, which the proponents of
independence have argued are necessary.

It’s that thirst for change, and recognition of the likely divergences,
that lay behind the Chancellor’s thinking when he said that a currency union
between the rest of the UK and Scotland was ‘unlikely’.

‘Unlikely’ because the simple truth is that, if we break up the United
Kingdom, we will have turned our backs on our shared interests, so that
we can instead develop separate interests.

And as everyone in business knows – you can get along very well;

You can be the best of neighbours;

But where you have separate interests you get divergence.

Doing things differently and creating differences is at the heart of
separating Scotland from the rest of the UK.

It is the inherent logic of creating a separate Scottish state.

There is no hiding the upheaval independence would bring

Even if the advocates of independence spend rather a lot of time trying to
assure us that all the good things we have as part of the United Kingdom can be
maintained under independence – that there will be no change to speak of.

As I say, that’s a creative approach, but it doesn’t really add up, does
it?

Those who advocate independence are surely not saying to people in Scotland
– vote for independence to keep everything the same as it is now?

Indeed – even people in the yes camp are starting to question this vision
of independence as a pale imitation of what they dream of.

And more to the point, it is something that the Scottish Government cannot
faithfully promise or deliver. Common sense tells us that.

Looking at the detail of their work throws up more anomalies and
contradictions.

We’ve looked at the work of the Scottish Government’s Fiscal Commission.

The Scottish Government like to highlight the Commission’s finding that
keeping the pound would be the best starting point for an independent Scotland –
but they refuse to set out their plan B or even what the long-term currency plan
is.

Instead the Scottish Government say that they will unilaterally use
sterling regardless – so called ‘sterlingisation’.

But if we then go back to their own Fiscal Commission report, those same
economists pointed out the downsides of sterlingisation: no central bank or
lender of last resort, no influence over monetary policy – in short this would
be, in the Commission’s own words, ‘no long-term solution’.

Another group set up by the Scottish Government to review welfare made
clear that it was given no guidance about the principles they should work from –
so no plan for what the welfare system should look like in a separate Scottish
state.

And far from recommending radical change it proposed that an independent
Scotland should keep the same system as we already have in the UK.

That’s the system that the Scottish Government like to say is flawed, but
their own experts say should carry on under independence.

If we turn to look at one of the most fractious areas of debate, over the
oil numbers, this is another area where the Scottish Government lauds the role
of independent experts.

But when the independent experts in the Office for Budget Responsibility
came up with figures, the Scottish Government didn’t like they cherry-picked the
highest, most favourable figures to base their public arguments on.

Something their own Fiscal Commission warned against doing.

But of course we know from the leaked Scottish Government Cabinet paper
that in private they are rather closer to our position on oil numbers and future
spending than they care to admit in public.

In private they say that, quote, ‘there is a high degree of uncertainty
around future North Sea revenues’… and

‘thatScotland would have a larger net fiscal deficit than the
UK’

They also acknowledge, and I quote again, that ‘at present HMT and DWP
absorb the risk…in future we will assume responsibility for managing such
pressure. This will imply more volatility in overall spending than at
present.’

I think that is a fair assessment by Scottish Government ministers – it’s
just a shame they won’t face up to it in public.

Concluding remarks

I gave a speech at the start of 2013 saying that I wanted this to be the
year we moved from process to substance in the independence debate.

That 2013 had to be the year of evidence and not assertion.

And that is exactly what we, as the UK Government, have done and will
continue to do.

We are setting out the benefits we continue to enjoy and the contribution
we have made working together for the last 300 years.

And we are setting out the opportunities and prospects that lie ahead if we
choose to remain part of the United Kingdom family.

Our Scotland analysis papers are setting out the analysis and facts.

Together they make the positive case for Scotland within the United
Kingdom.

We strongly and passionately believe that Scotland is better, safer and
stronger within our United Kingdom.

That’s our case.

We don’t shy away from that – we don’t pretend to be arguing for anything
else: we are making the case that we believe in, and we are making it
clearly.

And that’s what I am going to be doing throughout the Summer – to groups
like yours – right across Scotland.

Making the case that I am proud of.

The case that I believe in.

Thank you for the opportunity to set it out to you here in Dunfermline
today.